Macro digest: German export machine is being tested - Be long GERMAN bunds

I have been constructive on Bunds for a long time (http://www.tradingfloor.com/posts/buy-bund-call-142-017-146448732) and after nice profit and more balanced view I am now ready to go for next upside.

Buy 144.00 February Call Bunds @ 0.21/0.22 (See attached)

 The German economy is heavily exposed to global growth which we see dramatically slowing down - the strong EURO will impact export 5-7 month from now which creates dramatic slow-down where we even could see the German economy going below 1% growth and come close to recession.

Our Economy-Physics models sees slow-down next three to six-month then small rebound before dramatic slow-down in tail-end of 2014 - overall the German GDP will be challenged. German industry- and its consumer is increasingly becoming uncompetitive through one of the worst energy policies in Europe. Right now German companies (Read: BMW and Daimler) is either already moving or about to move jobs to mainly the US due to steep rises in energy cost.

The new coalition furthermore wants to pursue less flexible labor market model to "reset" inequality. Nice top line effort wrong method.

Finally, the European economy is almost perfect symmetrical in its peaks and valleys:  (Source: Bloomberg LLP & Citigroup CESI Index)

 Nice week-end

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

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